Top court grows confidence in protection of seed breeding

A case recently disclosed by China's top court has demonstrated the country's determination and efforts to protect business secrets concerning breeding, and has also provided guidance and references for seed companies.

The dispute between two seed companies — one in Hebei province and the other in Gansu province — was released by the Supreme People's Court at the end of last month, as a typical case of protecting private entrepreneurs.

As the first professional seed company that specializes in research and production of fresh corn seeds in China, the Hebei enterprise owned multiple new varieties. One of them, Wannuo 2000, whose parents seeds were W67 and W68, acquired the right of a new plant variety in November 2015.

In October 2020, the company initiated a lawsuit in Lanzhou Intermediate People's Court in Gansu, claiming that its technical secret relating to W68 was infringed by an enterprise based in Wuwei, a city in the province.

The Hebei company said that it was the owner of the technical secret, adding that the Gansu enterprise should be held accountable for the infringement.

The court found in favor of the Hebei company and urged the Gansu enterprise to stop the infringement as quickly as possible. The company was also ordered to pay more than 1.5 million yuan ($209,182) in compensation to the plaintiff.

The Gansu company later appealed to the top court, believing that W68, as a parent of Wannuo 2000, could not be treated as a business secret that needed to be protected.

After a hearing, the top court rejected the appeal and upheld the original ruling. It identified Wannuo 2000 as a breeding innovation, and clarified that its parents should be given judicial protection as a business secret as they were not publicly known at that time.

"Parents of crop breeding are the intellectual fruits of the breeders' creative efforts, and they also show the breeders' selection and refinement of pure plant materials," the court explained. "Therefore, the parents of Wannuo 2000 contain the technical information."

It was the first time that the top court heard a business secret case involving seed cultivation, and presented clear direction for lower courts on how to protect parents of breeding materials.

"The case is a guidance and reference for enterprises in the seed industry, helping them optimize their rules on protecting business secrets, so as to promote innovation of breeding materials and advance our country's high-quality development in this field," the top court said.

It added that the case has also encouraged private companies to protect their breeding results through intellectual property rights, such as business secrets, new varieties of plants and patents.

In recent years, China has seen stronger judicial protection on IP rights, with an intensified battle against offenses related to seeds. It also revised the Seed Law to offer more support for innovating and protecting new varieties of plants. The amended law came into effect in March last year.

In addition, it has stepped up efforts to protect trade secrets. Data released in March showed that 13,000 offenders were prosecuted in 2022 over breaches of trademarks, patents, copyrights and business secrets, a 51.2 percent rise from 2018.

For example, Beijing IP Court, which was set up in November 2014, had heard 182 cases regarding trade secrets by the end of 2022, of which, 136 have been concluded.